[ATV2] Problem with TS files

What I don't get is why SD material worked fine before in February and May 2011 releases for instance, but in the latest versions they chop horribly, so it can't all be ATV2's lacking horsepowers. Something has been changed that makes interlaced SD playback worse.

Yep - we don't know which change it was (my guess - something to the threading prioritys). But all changes made to the code where needed to fix some other issues (which hit a bigger userbase then interlaced material). So even if we knew it - we won't revert because the base issue would reappear then. We don't have much room to play on these parts of code because of the special app (frappliance) concept used in atv2/ios.